Enel Chile SA (ENIC) 2025 Q3 法說會逐字稿

Good morning ladies and gentlemen, and welcome to Enel Chile Third quarter in Nine months 2025 results conference call.

My name is Carmen and I will be your operator for today.

During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance, and involve risk and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors.

These factors are described in Enel Chile's press release reporting its Third quarter and Nine months 2025 results. The presentation accompanying this conference call and Enel Chile's annual annual report on Form 20 included on the risk factors. You may access our Third quarter in nine months 2025 results press release and presentation on our website at www.enel.chile in our 20 on the SEC's website at www.SEC.gov.

Readers are cautioned not to place on the reliance on those forward-looking statements which speak only as of their dates. And Enel Chile undertakes no obligation to update these forward-looking statements or to disclose any development as a result of which these forward-looking statements become inaccurate except as required by law.

I would now like to turn the presentation over to Ms. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed.

Good morning and welcome to Enel Chile's 2025, 30 quarter and nine month results presentation. We greatly appreciate you taking the time to joining us today. My name is Isabela Klemes, and I'm the Head of Investor Relations. Joining me this morning is our CFO.

Simone Conticelli.

Our presentation and financial related information are available on our website www.enel.chile in the investor section, as well as through our app investors. In addition, a replay of the call will be soon available.

At the end of this presentation, there will be an opportunity to ask questions via webcast chat through the link, ask a question. Media participants are connected in listening mode. Simon will kick off the presentation by covering key highlights of the period, our portfolio management actions, providing us updates on the regulatory contest and an overview of our business, economic and financial performance for the period.

Thank you all for your attention, and now let me hand over the call to Simone. Simone.

Thank you, Isabela. Good morning and thank you for your participation. Let's start the presentation with our main highlights of the period.

Let's begin with the portfolio management.

We served a high level performance of our thermal generation fleet which she offset lower ideological conditions during the port.

This outcome reflects our ability to adapt to evolving market dynamics and maintain operational stability.

In addition, our gas optimization activities continued to support our margin, reinforcing their strategic role in balancing our portfolio and mitigating exposure to spot market volatility.

On the distribution side, we achieved successful implementation of the comprehensive winter plan aimed at strengthening its resilience and improving service continuity under challenging climate conditions.

Indeed, our performance in the period was one of the best in Chile.

The winter plan included the deployment of emergency crews strategically positioned in high risk areas, ex extensive vegetation management action, and installation of new telecontrol units to reduce restoration time.

Additionally, targeted measures were implemented to support vulnerable customers, ensuring continuity of supply during adverse weather events.

Now let's move on to the Chile regulatory contest.

With reference to the VAD 2024 to 2028, a key milestone was the publication in the last weeks of the consultant report followed by the preliminary regulatory technical report. I will give you more details about it.

Furthermore, in October, was also released the preliminary regulated energy tariff report for the First 2026.

Now the Generation association of which is a part of, is working with authorities regarding the outcomes of the report.

Looking ahead, to regulated energy auctions are scheduled for the Fourth quarter of 2025.

Let's now turn to business profitability.

We crossed the first nine months of 2025 with a stable EBITDA compared to the previous year, despite the difficult contest and significantly lower ideology, demonstrating the resilience of our operations.

RSFfo remained positive, driven by the recovery of $261 million of receivables generated by the mechanism.

This inflow significantly strengthened our cash position for the for the year.

As a result, we maintain a strong liquidity position enabling us to support our development plan and to mitigate operational headwind associated with the market and climate uncertainty.

In the next slide, we will take a closer look at these topics to provide further insight, but let me anticipate that these achievements demonstrate our focus on operational excellence and sustainable growth.

We remain committed to delivering long-term value to our shareholders while advancing in the energy transition and strengthening the resilience of our business.

And now let's move to slide four to talk about the energy market situation, especially regarding hydrology and gas opportunities.

On the left side of the slide, you can see our id production over the last 10 years.

For 2025, we set our target at 10.7 terawatt hour, based on the last 10 year average.

Although 2025 has been a particularly dry year, our hydro production has remained in line with our strategic plan.

This was possible thanks to the flexibility of our hydroplanes with access to neurological basins. For this reason, we are keeping our ideology, the guidance and changes.

To manage this scenario, we relied also on the flexible and competitive thermal fleet supported by a strong and diversified LNG and Argentine gas supply.

He respond quickly to market needs and reduce exposure to hydro volatility.

As a result, we increased thermal production, use competitive gas, and favorable training opportunities, adding $74 million in margin during the first nine months of 2025.

Regarding gas business in October, we completed a gas sale to Europe with margins similar to those recorded in the second quarter of 2025.

Looking ahead to 2026, we are evaluating options to secure competitive GAAP from Argentina through firm contracts in line with the past year strategy.

And now moving on to the slide 5, let's review our generation portfolio and energy balance.

During the first nine months of 2025, net production decreased by 9% compared to the same period of 2024. This decline was driven by lower rider dispatch during the first nine months of 2025, reduction in renewable energy production due to the maintenance of two solar plants, higher curtailment levels also caused by transmission line limitations.

These efforts were partially offset by higher contribution from the efficient CCGT.

The same factors impacted the third core generation that amounted to 5.4 terawatt hour, lowered by 1.1 terawatt hour versus the same period of 2024.

Energy sales reached 22.7 terawatt hour, mainly due to the lower sale to regulated customers following the expiration of regulated contracts.

The regulated contrast volume reduction is also the main cause for the decrease of the third quarter sale from 8.4 to 7.6 terawatt hour.

And now I would like to take a moment to review an important milestone in the resilience program of our distribution business.

We are pleased to share that we successfully implemented a comprehensive winter plan aimed at strengthening the stability of our grids and guaranteeing service continuity during the most challenging months of the year, particularly for our most vulnerable customers.

First of all, we deployed 376 emergency crews across our service territory. These teams were mobilized to respond to outrages and restore power.

One of the most impactful initiatives was the execution of more than 115,000 tree trimming, which significantly reduced feeder failures in areas exposed to severe weather.

We also modernized the grids installing new telecontrolled unit. This helped us to isolate faults and reducing service interruption time.

In parallel, we implemented several infrastructure upgrades that enhanced network liability and quality of service for more than 193,000 customers.

Supporting vulnerable customers remains a priority for any, so we assisted more than 3,000 electro dependents ensuring continuity of supply through targeted measures.

Among them more than 2000 were equipped with digital meters while almost 2,900 received backup power solutions such as generators or battery systems.

Finally, we strengthened the collaboration with municipalities to improve coordination during extreme weather events. This joint approach has enhanced emergency response capabilities.

All this effort translated into tangible improvements in the performance of our distribution network which result that clearly demonstrate the effectiveness of the winter plan.

And now let's take a look at slide seven where we highlight key updates on the energy regulatory contest.

In 2025 we saw key changes in the regulatory framework. The distribution cycle for 2024-2028 is under development. In September, the consultant final report was published. Then in October, the CNE released its preliminary technical report with changes in maintenance and technical standards.

Company have until the 10th of November to submit comments. The final report is expected in 2026.

In parallel, we are currently awaiting settlement of outstanding debt related to the VAD decree for 2020-2024 published in April 2025. That is expected to be settled in 2026.

Passing to generation business on the fourth of October, on the 14th of October, the CNE published the preliminary technical report for the first part of 2026.

It includes a correction to the inflection aspects. We are reviewing the impact and waiting for the final report.

Passing to the stabilization mechanism as of September 2025, we have 149 million dollarsE one receivable to be fully recovered by the end of 2027.

Going to other relevant topics in August, can we to effect a resolution on best remuneration that authorizes the best to provide ancillary services.

In the last week, changes have been introduced in 2025 regulated auctions, increasing the volume of the 2027-2030 auction from 1.7 to 3.4 terawatt hour per year. The offer the line is now the 14th of November, launching a 1.5 terawatt hour per year short-term auction for 2026. The offer deadline is the second of December.

Finally, regarding subsidies, the 3rd electricity subsidy ran from the third of June to 15th of July, covering the period from July to December 2025. Around 341,000 annual distribution customers benefit of it. A bill to expand the subsidy is still pending in the Congress.

And now I will start reviewing the lights of our financial performance over the period.

Before we review the results, a quick reminder. As of January 1, 2025, and changed its functional currency from Chilean pesos to US dollars.

For comparison, nine months and third quarter 2024 figure are shown using the average exchange rate of these periods.

I will enter into details of our financial and economic performance in the next slide.

So let's move to the next slide to look at the progress made on CapEx.

Our total CapEx reached $245 million during the first nine months of the year, maintaining a focus on grids and power plant fleet performance.

Let's review the location in more detail.

41% or $101 million was directed towards Greek investments.

31% or $76 million supported thermal power projects.

27% or

$67 million was invested in renewable and storage.

Regarding Greece, the focus remains on the resident program to strengthen the grids and ensure service continuity under adverse weather conditions. Internal segment, the priority is the maintenance and performance enhancement of the power plant fleet.

In the renewable segment, we have to center our efforts on finalizing the AMGD program, enhancing hydro facility performance, and maintaining fleet viability.

Now let's move on to the breakdown by Nasir.

Asset management cap totaled $139 million accounting for 57% of total caps, mostly used for the maintenance of Atacama Quintero CCGT, the improvement of renewable fleet availability, and corrective maintenance and dig digitalization of grids.

Development CapEx was $60 million mainly driven by.

Investment for grid reliability enhancement, digital matters programs, and telecom telecontro deployment.

And for the completion of 2024 investment program for PMGD.

The 2025 development covers of battery related projects will be recorded starting from the next quarter.

Finally, customer cap totaled $46 million mainly invested in low and medium voltage connection project and initiative to support load increase.

Let's now turn to the next slide which provides a closer look at our EBITDA performance.

During the last quarter I bid a total of $345 million representing a decrease of $63 million compared to the same period of 2024, mainly explained by the following factors starting with the we recorded a decrease of $89 million in PA sales, mostly due to determination of some high price regulated contracts that impacted on volumes and average price of a regulated portfolio, partially offset by the negative impact of exchange rate hedges recorded in 2024.

Regarding sourcing, its contribution remained in line with the same period in 2024. This result was mainly achieved thanks to our optimized sourcing strategy and the issuance provision, mainly coming from Gatta Gamma, which effectively offset higher costs in the energy spot market, mainly due to the higher purchase volume.

Gas trading contributed positively with a $5 million margin increase, mainly fueled by expanded trading activities in the third quarter of 2025.

Turning to Greece, we recorded a positive impact of $170 million mainly driven by a regulatory provision reflecting the settlement adjustments for the previous year and higher OpEx recorded in the third quarter of 2024 due to the extreme weather events that occurred in May and August.

These effects were partially upset by the increase of OEM expenses, mainly associated with the implementation of the comprehensive winter plan.

And now let's move on to the next slide to review the main impacts on EBITDA during the 9 month period.

I reached the $1,004 million remaining flat compared to the same period of 2024.

Starting with the generation business, we recorded a decrease of $244 million in PPA sales, mainly due to determination of high price regulated contracts, partially offset by the negative impact of exchange rate hedges recorded in 2024 and the positive price effect due to the indexation of the free market contracts.

Regarding sourcing, we recorded a positive effect of $192 million despite the $34 billion negative impact related to the transmission line restrictions following the February blackout and the additional second quarter issues.

The result was obtained thanks to lower port and third parties energy purchases costs.

Energy settlements from previous periods already anticipated insurance provision, and finally lower transmission costs.

In the First Nine months of 2025, gas margin contributed for $27 million also thanks to the increase of the gas training activity versus the same period in 2024.

Passing to Greece, we recorded a positive impact primarily driven by the provision reflecting the higher tide expected for the 2024-2028 regulatory period and tariff indexation.

Some settlement adjustments from the previous year, higher OpEx recorded in the period 2024, mainly due to the extreme weather events.

Partially offset by the increase of OEM expenses mainly associated with the implementation of the comprehensive winter plan.

We also recorded an increase of generation cost due to the new developed capacity and the maintenance activities.

Finally, in 2025, specifically in the second quarter, we recorded the personal cost one-off effect, mainly for the incentivize every re retirement plan to support the company organization aimed at improving internal skills and performance.

And so now let's move on to the next slide where we will review the net income evolution.

Our 9 months 2025 net income reached $352 million a 21% decrease compared to the last year figure, mainly as planned by higher depreciation, amortization, impairment, and bad debt expenses for $84 million mainly due to The commissioning of new renewable capacity amounting to $32 million. The impairment related to our decision not to proceed with the new PMGD solar project initially planned for development in this area. And finally, the $12 million increase of Greek debt provision, mainly due to the higher bidding resulting from tariff increase and long overdue customer debt.

Regarding financial results, we recorded a negative variation of $38 million mostly explained by the lower capitalized expenses on renewable projects by $61 million partially offset by lower financial expenses for $29 million resulting from lower average outstanding debt and lower average interest rate.

The latter was partially offset by a $20 million reduction in corporate income tax expenses, mostly explained by lower results.

Focusing on the quarter, net income decreased by $74 million mainly due to A $63 million dollar decrease in EBITDA, a $29 million increase in the recession and amortization and bad debt, primarily due to the operation of a new renewable capacity, and an $11 million dollar increase in financial results mainly due to the lower capitalized expenses of renewable projects.

The latter was partially offset by a $23 million reduction in corporate income tax expenses, mostly explained by lower results of the period.

And now let's move on to the FFO analysis on the next slide.

Let's analyze the FFO composition for the First Nine months of 2025 and the main effect compared to the same period in 2024. FFO reached $650 million presenting an improvement of 240.

$8 million compared to the previous year. This is due to the following factors.

First, it be that $1 billion remaining flat compared to the same period last year as previously explained.

Second, the recovery of pack receivable in 2025 contributed for $285 million mainly thanks to factory executed in April 2025 credited 23. And recovery to the tariff of $31 million of receivable.

It is worth mentioning that we observe a positive (Inaudible) of $248 billion versus the nine months 2024 thanks to the end of accumulation of receivables started in October 2024.

So, the increase of networking capital impacted for $329 million mainly due to the 2024 development cap payment, lower collection in our distribution business, and other seasonality effect.

The increase was higher by $255 million versus the previous year, mainly due to the negative effect of energy payment scheduling and the voluntary compensation paid in 2025 regarding the extreme climate event from May and August 2024. These effects were partially offset by lower coverage payments to renewable capacity.

Fourth, the income taxes impacted on FFL amounted to $231 million mainly due to the tax payment in the generation business.

Income taxes paid in the nine months 2025 were higher by $63 million compared to the nine months 2024. This difference is mainly due to the increased tax payment in the generation business driven by both higher results and higher monthly payment tax rates.

Finally, financial expenses were $130 million mostly due to the debt related costs. This represents a reduction of $52 million compared to the nine months 2024, mainly driven by a lower average debt this year.

And now let's take a look at our liquidity and leverage position.

Our gross debt is 3.9 billion at the end of September 2025 in line with the gross debt as of December 2024.

The average terms of our debt maturities decreased from 6.2 years as of December 2024 to 5.5 years as of September 2025, and the portion at the fixed rate is 87% of total debt.

The average cost of our debt reached 4.8% as of September 2025, decreasing from 5.0% in December 2024, in line with our efforts to optimize the financial costs.

Regarding liquidity, we are in a comfortable position to support our capital needs for the coming months and cope with the next year maturities.

As of September 2025, we have available commuter credit lines for $640 million and cash equivalent for $373 million.

And now I would like to share the following closing remarks.

In the coming months, significant regulatory updates are expected that will clarify tariffs and market mechanisms. These represent an essential step to refine our long-term strategy and to ensure that our investment decisions remain aligned with regulatory developments.

We are implementing productivity initiatives to address portfolio dynamics and climate challenges. This includes action to strengthen our generation and distribution businesses, improve risk management, and enhance our ability to respond to extreme weather events.

The measures are designed to safeguard service continuity and maintain system stability.

Our solid financial position and flexible business model allow us to follow with our business plan even through market uncertainties while continuing to invest in strategic renewable and best projects and deliver sustainable returns for our shareholders.

Finally, we are preparing for our 2026 Investor Day scheduled for the first quarter of 2026, where we will share a comprehensive view of our strategy and the action that will drive long-term value creation.

And now let me hand it over to Isabella for the Q&A session.

(Operator Instruction).

Okay, so, Simone, the first question is coming from (Inaudible) has four questions, so I will be talking one by one, okay? So the first one is, what is the amount that Enel Chile must return to customers due to the miscalculation of the CNA included in the first half, 2026 PNP reports.

Okay, thank you, Rodrigo. Just to give some contest, so in the first half of October, the he explained that they have changed the the the formula of the population of the PN and so this change in the formula will have some impact.

And we have calculated the impact for in an amount that is between $40million and $45 million. So we have to expect a negative provision in terms of mainly financial cost. So the impact will be mainly in in the financial items.

And in your question you talk about customer, but in any case just com the customer were impacted just for a small amount because just the 2% of the total amount of the changes was the customer in the so this amount will be.

Accrual by in 2025 and then we will pay it back in the form of the process is not so clear but in any case we expect in the first half of 2026 but the amount will not impacted directly for the total value of the customer.

Okay, thank you, Simone. So the second question now is on Enel distribution. So what is the amount on to distribution Chile in connection to the VID 2020-2024?

Okay.

So talking about the remuneration period 2020, 2024, we are really not finalizing the last steps of the process. So the amount that was already be defined and what we are waiting is that the sector will say when we have to receive back the the the missing part. And the amount, in this case is around $55 million.

There are two possibilities if you want to be prudent, you can imagine that the cashback can start middle of 2026, even if I remember in the view of the new minister of energy that say that that the process can also be faster and start earlier.

Okay, thank you, Simone.

So now let me check here. We have the third question. So the third question of Rodrigo now is on generation side on the LNG strategy. No, so could you please explain about your strategy.

Regarding LNG and Argentina Gas?

For interrupt for the year 2026. How many ships do you plan to buy?

So as for us, the gas business is very important because we need gas for our thermal power plant, but also because we find that during the year some creative opportunities to make margin to our gas.

We are basically a long-term gas for LNG.

And more or less the volume for more than 2 per year and so in 2026 we'll keep on using this contract in these very days we are working, we are negotiating Argentinian supplier to. Add new contract for Argentinian gas and so in this moment, I cannot talk about this negotiation.

The negotiation is ongoing and well.

Okay, thank you, Simone. Now the last question of Rodrigo is regarding CapEx on generation business. No, regarding CapEx for generation, could you please give us an update for 2025 and actually we also received the same question from Balance as well.

So, very well, and talking about this year CapEx, as we.

All of the plan with one exception that was the Apex for the development of the new system, because we Recorded a little delay for this project and it was due to strategic reason. I mean we wait where the new piece of regulation will be best. I mean the regulation for. The participation of space in the ancillary service market and then we keep on studying the evolution of the market and the penetration of the best in the Chilean production.

So we started a little bit late in the project and in the first report, the amount of capital. The project was compared to the, but the project had been already started are ongoing, and so you will see in the last quarter in total talking about (Inaudible) generation investment for more or less $10million $16 million US dollars and a part of this investment will be the best.

And then we keep on growing investment on thermal.

How strategic is the thermal fleet and of course in case of low low water in the system, our efficient CCGT plants are called to so we have to keep all these plants at the highest level of efficiency and performance.

Okay, thank you. And we have a final one, sorry, Rodrigo. We have five questions from.

(Inaudible). So.

The last one is on distribution side, okay? On distribution could outline the measures being taken to address the increasing energy losses.

Okay. Talking about losses in energy.

We have discussed the the the losses getting higher, in the last year started from 2023, and so in this moment, the percentage of losses is a bit higher than 6%.

Which is the reason can be many reasons, but the most important reason is the increase in the tax so that the the final customer, no, and so a little bit a change in inhabit related also to this increase in tax.

What we are doing from one side we have Increasing the activity to recover these losses and so we have recovered more than expected in the initial planning to losses.

And

On the

Other

Side, we are making other action.

For example, and launching flexible payment plans for the customer that want to pay the new bill.

We have a new smart special tool.

We work on formats to localize where the office are originate. That and then we can intervene and finally we are working with the regulator to TRY to find changes also in the regulation that can help to contain this.

Okay, thank you, Simone. Now move on. We have questions from (Inaudible). Thanks for the question. So the question is the company in Enel Chile confirmed its latest guidance?

So the answer is yes, but just some contest. This was a very tough year in terms of ideological situation. So, finally, the season was drier than expected, but in many days we show our flexibility as a company we leverage on our. Very profitable gas contract we use the flexible and efficient CCGT and so we have those, so we maintain higher production also our hydropower plant can use reservoir and so also the production for.

Did not decrease so much and given all this action and the flexibility the company built in the past year, we can react to this adverse climate conditions and achieve we can confirm the results.

Okay.

Thank you, Simone. So, move on. The next one is It's also from (Inaudible). It's about the FFO. So could you explain the dynamics of FFO during the nine months of this year, and your expectation by the year ends.

Okay, talking about the FFL, talking about our, the FFL usually is concentrated in the second half of the year and particularly in the last quarter, and the main reason is that visa is higher than the speed of the, and so on.

This year in the first nine months, and we have a very high level of FFL and this was.

Thanks to the not ordinary cashing from regulatory processes, so we cash in around $300 million US dollars recovering cash from the.

Looking ahead, the cash flow from ordinary business will be higher compared to the 1st month in the last period, and also we will have more efficient management of the networking capital because in the last part of the year, the the.

The focus in the last part of the year. So also the network can be managed in a more way, and so we expect to improve the performance of FFO in this last which is more or less the dynamic.

Okay, perfect.

So now the next question is coming from (Inaudible)

So nice talking about the best, not the storage that we are implementing. So, I will read here. I saw that best lass Salinas.

200 megawatts and best of a batche, 58 megawatts were declared under construction at the CNE.

Do these projects involve additional solar capacity or just the energy storage? There are still an additional 200 megawatts of best capacity to meet your announcement plan.

Will this be added to existing solar PV in the north?

Yes, so, talking about the strategy of best, we have launched three projects, this year in line with what was expected in the plan.

And this project are hybrid project, so we are going to implement best system in our solar power plant in the north and why we do this in general, the best can be profitable also like a standalone device.

But the profitability is higher if you use the best system toilize our our plans and why? Because the project is faster. You need less.

And environmental, document to be produced, considering that you are, be the best in your plan and also we have some saving in terms of cost and electrical infrastructure and so I think that they have answered the question this moment that we are not increasing the solar capacity. You are just abridizing the solar projects.

Okay, so let me check here. So we have another one from (Inaudible).

Well, part of the question was the right answer, so, I just keep the one that, wasn't yet. So thank you for the presentation.

And he has one question. If I'm not mistaken, you had a target for 2025 or $500 million for expansion projects, mainly relating to batteries to storage. How has that changed by now, given that you are expecting a resolution on ciliary services before moving forward? And what the resolution in line with your expectations? Do you think will be enough to unlock high investment in storage?

Thank you.

Okay, so in our current power plant we put more or less megawatts of new cap and you are right, 450. This project should have been launched at the beginning of the year and were launched in and so you can expect a movement of the COD.

The city was in 2026 and then the new CD will be in 2027, and this will have an impact, but in any case, we start from a fleet of around 9 gigawatts of production and so this change is not a a a a huge change. Talking about regulation. So in August 4th of August was launched this new regulation that said that can participate in a service.

It means that this is very good news for the country because the best are a very important element that can stabilize the system at a very low cost. And so reducing the cost of the system is also reducing the cost of the participant.

In terms of revenues, it's not a huge increase, but it's in line with expected talking about the current bed that we have our beds that we have already installed its among $5 million and $7 million US dollars per year, but in case it's an important step because for me to make the best project a little bit more profitable than considered in the beginning and it means that they are profitable also imagining a higher penetration of projects.

Okay, perfect. So we have, the last question that is from (Inaudible) So the question is, do you have any news for unregulated PPA contracts?

And Well, in this moment, no, we don't have any news to stop.

Okay, perfect. Let me just check if we have no more questions. Okay. If there are no further questions, we formally conclude our conference call. The investor relation team is at our disposal for any further inquiries. Many thanks for joining us and have a great rest of the week.

(Operator Instruction)